Now who clears the debt – Delhi Airport Metro row taking new turns daily

New Delhi:  The arbitration panel – which is supposed to sort out the dispute between Delhi Metro Rail Corporation (DMRC) and Reliance Infra-promoted Delhi Airport Metro Express Pvt Ltd (DAMEPL) that led to the latter’s unilateral pull-out from the project – has not yet started its hearing, sources told RailNews.  Even as the dispute settlement is on, there is still no clarity on who will service the debt to the lenders.

The revenues from the airport Metro express project are lower than the projections of both DMRC and Reliance Infra, which had won the rights to operate the line through competitive bidding.

A consortium of 11 banks, led by Axis Bank, has an exposure of almost Rs.2,000 crore to the project.

DAMEPL, which exited the project after giving multiple termination notices to DMRC, says that all responsibilities, including paying back the bank debt, will have to be borne by the “new operator”. This is as per the mode and modalities defined in the concession agreement, said a DAMEPL source, declining to be named. However, DMRC Chairman and Urban Development Secretary Sudhir Krishna maintained that till concession agreement was terminated, the debt would have to be serviced by DAMEPL.

Krishna said this while replying to a query on whether the Urban Development Ministry would put in additional funds in case of DMRC taking over the Metro line.

DAMEPL sources said they had claimed a termination payment of about Rs 2,800 crore from DMRC. They said DMRC was obliged to pay a termination payment equivalent to 130 per cent of equity and the entire remaining debt.

As per the financial statements of DAMEPL, the liability of DMRC amounts to around Rs 2,800 crore. DAMEPL has intimated the same to DMRC (in) its letter dated October 8, 2012.

It would pursue the matter with DMRC for this payment, said DAMEPL sources requesting anonymity.

Some of the project lenders said they had written to DMRC to ensure that lenders’ interests were protected.